Our attorneys are experienced with assisting clients with structuring their aircraft operations to comply with the often counterintuitive regulations of the FAA.
Transaction Highlights
Representing an aircraft owner in connection with arrangements for having its aircraft appear in the MGM major motion picture James Bond 007 Casino Royale starring Daniel Craig.
Represented aircraft owner in connection with the acquisition of Dassault Falcon 900 as part of synthetic lease financing and reverse 1031 exchange involving synthetic lease.
The Dilemma of Single Purpose Entities
Because of the flexibility given to operators under Part 91 of the Federal Aviation Regulations (“FARs”), most corporate “flight departments” choose to operate under Part 91 as opposed to the more restrictive and certainly more costly air carrier certificate “charter” operations under Part 135.
The threshold question for determining if an aircraft operator is eligible to operate under Part 91 is whether the operation of the aircraft is incidental to the primary business of the operator. An entity that is formed solely to operate an aircraft (i.e., provide aircraft and crew) to carry persons or property, also known as a “flight department company,” would not meet the test for operating an aircraft “incidental” to a primary business because, by definition, the single purpose entity, often a single member LLC, has no other business (other than transportation). At least four FAA interpretations confirm this interpretation.
Practically, when an aircraft is operated by a single purpose entity that owns or leases the aircraft and provides the crew (directly or indirectly), the FAA views such an operation as operating for “compensation,” regardless of whether the entity is carrying its owners or any other party and, accordingly, requires the operator to hold a 135 charter certificate. The FAA and Department of Transportation construe “compensation” broadly. For example, because the entity engages in no other business, capital contributions from the operating entity’s owner to cover the cost of the operation of the aircraft could be deemed payment in exchange for the provision of transportation to the owner or to any other party. Therefore, under current FAA published interpretations, single purpose entities are not eligible to operate aircraft under Part 91.
Our attorneys are experienced with assisting clients with structuring their aircraft operations to comply with the often counterintuitive regulations of the FAA.
AVIATION RESOURCES
KEEPING YOU ON COURSE
We are experienced in working with tax, legal and financial advisors of companies of all sizes in addition to family offices, to implement appropriate operating structures and planning objectives. For first time business aircraft buyers, we can quickly assemble a team of experienced industry professionals and others to assist the client with business, technical and other aspects of an aircraft purchase and ongoing aircraft management under Parts 91 and/or 135 of the Federal Aviation Regulations.
One of the challenges of using aircraft in business is understanding the effect of personal use on an executive and the company, and strategies for addressing income tax issues.

Personal Use
Letters of intent are an important start to most aircraft transactions, and failing to give them the proper attention can create costly misunderstandings.

Letters of Intent
Understanding the aircraft acquisition process is important in order to avoid common pitfalls and costly mistakes.

Aircraft Acquisition Process
In order to register an aircraft with the FAA, an individual or company must meet specific requirements. There are methods available for non-U.S. citizens to register aircraft with the FAA.

Aircraft Registration
Public Companies have unique concerns when purchasing corporate aircraft and structuring their operations, including from the perspective of SEC disclosure of non-business use, security and confidentiality.

Public Companies
Acquiring an aircraft currently registered outside the United States takes careful planning and requires answering some fundamental threshold questions. Exporting aircraft may not require the payment of duty, but failure to make appropriate customs entries can be costly.

Import / Export
Planning opportunities exist that can defer or even eliminate the imposition of sales and use taxes in almost every state.

Sales and Use Tax
In addition to aviation counsel, a successful transaction requires having experienced aviation professionals and tax advisors.

The Right Team
Our attorneys are experienced with helping clients navigate the often counter-intuitive rules of the FAA and other regulatory authorities.

The Dilemma of Single Purpose Entities
When acquiring an aircraft, several financing alternatives are available. Which is right for you?

Financing Options
THE RIGHT TEAM. THE RIGHT DEAL.
We don’t believe in the no-win scenario. Aviation transactions are fluid and can change quickly. We are ready to adapt and find a solution.
- Stewart Lapayowker